If Government Backed Geothermal It Would Account For a Significant Amount Of UK Energy

By Cynthia Taylor

Geothermal sources in the UK have the potential to provide approximately 83TWh of electricity generation per annum. That is about 20% of the UK’s electricity consumption annually and about 875TWh of heat energy annually, this is more than is needed to supply the UK’ current water heating and space heating for the country.

The energy needs for heating the UK, amounts to approximately half of its requirements for total energy consumption over a year. Energy demands for space heat are about 400TWh and water heating is about 105TWH annually.

In a new report it states that geothermal potential in G.B. and Northern Ireland is the first study of the potential that geothermal has in the UK it has been identified that the deep hot spots are situated in Cornwall, the Lake District, Lincolnshire, East Yorkshire, Weardale, Cheshire, Worcester, Dorset, Hampshire, Scotland and Northern Ireland.

These identified hot spots contain sufficient energy to supply most of the space and water heating needs for the UK using a series of commercial projects, however, the technical complications that surround the large scale project will likely limit the effective usage of geothermal heat for the communities that are close to the hot spots.

Geothermal electricity is probably more widely distributed then heat and it does not have the same constraints that heat transfer has, thus, it allows for a larger proportion of the energy generation to be released. To increase geothermal energy production in the UK, it requires support from the government so that investment can be stimulated in this under developed sector of the industry.

Any geothermal investment in the UK will need international and competitive investments to achieve success. The situation in Europe is that Germany offers the most attractive investment choices, and it has lots of support from the German government and their geothermal generation of electricity is about £300MWh of the equivalent of 5 UK Renewable Obligation Certificates (ROC’s) – the UK support was proposed that it remain at 2 ROC’s that is about £130/MWh. The Renewable Obligation banding review will soon be announced and it will determine how much support there will be from government up to the year 2017.

The geothermal sector of the industry hopes that the government support will be increased up to 5 ROC’s when the newest support levels take effect in April 2013.

This will bring the level of support for geothermal to the same or similar level with tidal and wave that is considered to still be in the ‘infancy state’.

The initial number of geothermal power projects will result in a low extra cost for the government of about £11 million annually. Geothermal heat is not as costly as geothermal electricity, however it requires a competitive tariff during the second phase of the RHI (Renewable Heat incentive) scheme for it to progress and this is due to take effect during September 2013, with the suggested rates for the stimulation of growth in this sector is £30/MWh for projects that combines heat and power and £50/MWh for project of heat over 5MW and £70/MWh for project of low level heat under 5MW.

These tariffs could be expected to increase costs of the RHI scheme by £1.3 million per year, taking into consideration the contribution that the deep geothermal energy could make to the supply in the UK, this will be one of the most economical methods that the government could substitute fossil fuels with renewable energy at the same time reduce emissions.

Since 2009 the cost of deep geothermal power and heat has been reduced considerably and have been predicted that they will continue to fall.

The techniques for the fracturing of granite and the extraction of energy have improved over the years, and with better surveys have shown that larger energy resources exist in the UK, more than was previously thought.

The bankability of geothermal power and heat need government support to make electricity generation viable economically to exploit the resources, at the same time determining suitable levels of support financially the best methods of obtaining financial support, and good support will be a crucial factor to any success in the sector.

It was mentioned that there is also a large amount of uncertainty about the data provided by these recent surveys with regard to the temperature gradients and the hot rocks permeability which need to be considered when making decisions. Some of the test wells have proven data, there are a large capital costs for exploration of new projects and start-up wells.

Risk insurance would help to stimulate investment in the geothermal industry in the UK, and with the announcement of the government’s Renewable Obligation banding’s review, it will be critical to determine the future of deep geothermal industry and unless there is a dramatic shift in support for this sector of the industry, this will remain unexploited in the UK.